Wells Fargo said on Friday it reached a deal to buy Wachovia for about $15.1 billion out from under Citigroup‘s nose.
We still haven’t heard back from Citi, so the question now is whether Citi simply walked away from a deal it – and the market – had seemed so excited about just days ago or whether it will come back with another bid. The latest from Citi’s website is that they are committed to the Wachovia transaction – that was Sept. 30.
Another bid? A bidding war? A bidding scuffle?
Seems unlikely in this time of failures, toxic waste and bailouts, and Citi certainly has plenty of trouble of its own. But Warren Buffett and others have been quite vocal about the great deals out there to be had, and certainly Wells Fargo seemed to have missed the boat when Citi made its initial bid — which was worth $2.16 billion for everything but AG Edwards and Wachovia Securities and included a fund business.
Wells is ponying up for the whole Wachovia. Citi’s share price was tanking in premarket trade, and analysts were quick to note that the failure of a Citi/Wachovia deal is as big a blow for Citi as it was for struggling Wachovia. While a full-out war for Wachovia seems unlikely at this point, a higher price for Wachovia can’t be anything but a good thing for a market that has spent months trying to figure out how to value dud bank assets.
Deals of the day:
* Mitsubishi UFJ Financial Group will consider merging its securities arm with Morgan Stanley’s Japan business, as Tokyo’s biggest lender looks to capitalize on its $9 billion Wall Street investment.
* Ukraine-focused oil and gas explorer Regal Petroleum denied it had received a $1.2 billion takeover approach from oil Major Royal Dutch Shell.
* Japanese property firm Daito Trust Construction shelved a planned buyout that could have exceeded $6 billion, after the funds behind the deal failed to raise enough money amid the global credit crunch.
* Plans by Ireland’s Elan Corp to sell its drug delivery unit in an auction have been delayed by the credit crisis but some discussions are still continuing, people familiar with the situation said.